U.K. Residential Market Shows Signs of Stabilizing Post-Brexit

The appointment of a new prime minister helps to tame rocky landscape, market update says

Data on the U.K. residential market post-Brexit is just starting to arrive, but recent events, including the appointment of a new prime minister, are seen as positive for the industry, a new report has concluded.

“Increased political certainty as Theresa May settles into her role as prime minister alongside a new cabinet is a positive development for all markets,” said the report’s author, Gráinne Gilmore, head of U.K. residential research for Knight Frank.

Ms. Gilmore also pointed out the Bank of England’s decision to leave its base interest rate unchanged this month as boosting confidence in the U.K. economy.

Average prices in prime central London decreased by 0.6% in the first six months of this year, falling by 0.2% last month alone, according to the report, the UK Residential Market Update. Without providing specific numbers, the report also mentioned an increase in transaction levels at the end of June compared with the final week in May, albeit from a very low base.

Ms. Gilmore also sees the weakness of the pound as positive for foreign buyers.

Separate from the report, Richard Bernstone, director of central London agency Aston Chase, said it is too early to make optimistic statements, but transactions are taking place at all levels. His office recently sold a house for around £4.5 million (close to $6 million) to Chinese buyers taking advantage of the weaker British currency, he said.